Reversing intraday gains, Indian equity benchmark indices tumbled in a volatile session in trade Thursday as cautious investors turned their focus to the release of the Reserve Bank of India's (RBI) policy meeting minutes. The Nifty 50 index closed 0.29 percent lower at 19,387, while the S&P BSE Sensex plunged 181 points or 0.28 percent to settle at 65,252.

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The stock market opened strong following positive cues from global markets and extended the gains in the initial hours of trading but then declined on widespread selling in the second half to end near the day's low. The BSE midcap and smallcap indices ended on flat note.

Indices were also dragged down by the heavyweight Reliance Industries, HDFC Bank and Jio Financial Services, which overpowered the rise in information technology (IT) stocks.

On Thursday, JFSL shares also hit a 5 percent lower circuit to Rs 215.9 on BSE for the fourth straight day in a row amid likely selling by both passive funds and active mutual funds. JFSL is currently part of key indices of the BSE and NSE, including the Sensex and Nifty 50.

"Domestic equities pared some gains amid profit booking after three days of positive close. Nifty snapped its initial gains and closed with a marginal loss of 57 points at 19,387 levels. Nifty Midcap 100 outperformed the benchmark and ended in green. Sectorially, it was a mixed bag with buying seen in IT, Realty, FMCG and Banking space. Railway stocks were in momentum on account of the strong order book and rising allocation in the rail infrastructure by the government," said Siddhartha Khemka, Head - Retail Research at Motilal Oswal Financial Services.

All eyes would be on the outcome of the Jackson Hole meeting, which is expected to provide some direction on interest rates going forward. US Federal Reserve Chair Jerome Powell will likely map out final steps in the US central bank’s campaign to curtail inflation, when he speaks in Jackson Hole, Wyoming on Friday.

Nifty, in the meantime, is expected to remain in a narrow range with some stock-specific action in the broader market, say analysts.

"The US market exhibited a positive trend as declining US PMI ignited hopes of a prolonged rate pause, calming US bond yields. Optimism in the domestic market was more visible in the IT sector, though sentiments were reversed in other major sectors, likely influenced by the prevailing global uncertainties. Despite this, mid- and small-cap stocks demonstrated resilience, and the decline in bond yields facilitated a resurgence in foreign investor buying momentum," said Vinod Nair, Head of Research at Geojit Financial Services.

Tech view

"The move indicates that bears are not in the mood to lose their control and tone may deteriorate again on the break of 50 EMA i.e. around 19,285. We have been maintaining a view stance to focus on stock selection amid choppiness and it is working well so far. Traders should avoid aggressive positions and prefer hedged trades until we see some clarity over the next directional move," said Ajit Mishra, SVP - Technical Research, Religare Broking.

On Nifty, Rupak De, Senior Technical analyst at LKP Securities said: "The Nifty remained under the bear's grip as selling pressure emerged around the day's high, resulting in a decline below 19500. On the upper side, resistance is expected to persist in the range of 19450-19500. A definitive breakout or a closing above 19500 could potentially trigger a rally in the index. On the lower side, there is immediate support at 19300; a drop below this level might lead to panic in the market."

First Published:Aug 24, 2023 3:54 PM IST